Bitcoin, the world’s largest cryptocurrency, took a hit on Monday, dropping to $83,191 after a week of losses. Traders are on edge as they wait for the U.S. Federal Reserve’s interest rate decision, which is set to be announced this week.
Many experts believe the Fed will keep rates unchanged, just like it did in January. This decision could have a big impact on the crypto market, especially Bitcoin, which often leads the way for altcoins.
Fed Rate Decision To Impact Crypto
The Federal Reserve is set to announce its interest rate decision covering February’s data. Ahead of this, crypto investors are staying cautious, as the Fed’s policy meeting on March 18-19 is expected to keep interest rates unchanged.
According to the CME Group’s FedWatch tool, there is a 98% chance that rates will remain the same.
Market analysts are keeping a close watch on Bitcoin’s key price levels. If BTC stays above $81,000 by the weekly close, it could show strength in the market. However, if the price drops below $76,000, it may lead to more selling pressure in the short term.
On the other hand, if Bitcoin closes the week above $85,000 to $90,000, it could boost investor confidence and possibly trigger the next major rally.
Key Factors That Could Drive a Price Surge
One major factor is the U.S. dollar. The dollar currency index (DXY) has been falling, which is usually good for risky assets like Bitcoin. When the dollar weakens, investors look for other assets, and that often pushes crypto prices higher.
Another important point is global liquidity. Central banks worldwide, including the Fed, have been printing money to keep economies stable. More money in the system often leads to higher asset prices, including stocks, real estate, and crypto.
If the Fed signals an end to quantitative tightening, which means stopping its effort to reduce the money supply, the market could react positively.
Altcoins Struggle with Heavy Losses
Ethereum (ETH) has been struggling as sellers continue to dominate. After falling 9% in a week, ETH is now trying to stay above $1,900 and recover to $2,000. At the same time, Ethereum’s daily active users have dropped sharply, falling from over 700,000 earlier this year to just 293,000 now.
Other altcoins are also in the red. Solana (SOL), XRP, Cardano (ADA), and Tron (TRX) have all seen big drops over the past week. Many experts believe that a Fed rate cut could bring a strong comeback for the crypto market.
